US Charges California CEO in $300M Nvidia AI Chip Smuggling Scheme
Federal prosecutors allege Greg Lui used shell companies and transshipments through Malaysia and Singapore to bypass US export controls on advanced artificial intelligence hardware.
Key takeaways
- Greg Lui, owner of Earthmade Computer Inc., was arrested and charged with smuggling more than $300 million in restricted Nvidia servers to China.
- The scheme allegedly used falsified paperwork and intermediate shipping routes through Malaysia, Singapore, and Hong Kong to evade U.S. Commerce Department licensing rules.
- Hardware named in the indictment spans enterprise accelerators like the Nvidia A100 and H100 alongside consumer graphics cards including the RTX 4090 and RTX 5090.
- Lui faces three felony counts carrying statutory maximum prison terms that total up to 50 years if convicted.
Federal prosecutors have arrested and indicted a California technology executive for orchestrating an elaborate operation to smuggle more than $300 million worth of export-controlled artificial intelligence hardware to China. The indictment, returned on September 29, 2026, and announced by the U.S. Department of Justice on October 1, charges 38-year-old Greg Lui with using his Southern California business to illegally divert high-performance computing systems around United States export restrictions.
Lui, also known as Yiu Kong Lui, is the owner of Earthmade Computer Inc., a City of Industry-based company founded in 2021 that offers server procurement and data center services. According to court filings reported by Newsweek, Lui operated the company as a procurement intermediary, acquiring advanced servers from U.S. manufacturers by claiming they were destined for authorized customers in Southeast Asia while covertly routing them to buyers in China, including the Chinese government.
How the GPU Smuggling Scheme Evaded Export Controls
Under regulations administered by the U.S. Department of Commerce's Bureau of Industry and Security, advanced graphics processing units (GPUs) engineered for high-performance computing cannot be exported directly to China without explicit federal licensing. Prosecutors allege that from 2023 through 2024, Lui and unnamed co-conspirators systematically bypassed these restrictions by executing transshipments through intermediary jurisdictions where export licensing is not required.
According to reporting from Tom's Hardware, the indictment details multiple instances of falsified end-user documentation submitted to U.S. server suppliers. In one transaction from January 2024, Lui submitted a purchase order for 27 high-end servers totaling approximately $7,614,000, which were shipped from Los Angeles to Kuala Lumpur, Malaysia. A co-conspirator later confirmed in an email to a Malaysian government official that all 27 units had been transshipped to a Chinese buyer.
Court filings detailed by shattered.io reveal additional complex routing patterns. In another flagged operation, 92 servers were routed sequentially through Singapore, Malaysia, and Hong Kong before reaching their final destination in Hangzhou, China. In a separate deal valued at more than $22 million for 100 Nvidia H100 servers, Lui allegedly used the stolen identity of a real individual to establish a fake purchasing entity headed by a fictional executive named Jackie Lui.
Data Center Silicon and Gaming GPUs Named in Indictment
Court records specify four distinct GPU models involved in the diversion network: Nvidia's enterprise-grade A100 and H100 accelerators, alongside consumer-oriented GeForce RTX 4090 and RTX 5090 graphics cards, according to shattered.io. While the A100 and H100 are specialized data center processors optimized for training large language models, the inclusion of top-tier consumer gaming cards indicates that overseas buyers have sought to assemble compute clusters using any available high-bandwidth Nvidia silicon.
As reported by the Los Angeles Times, U.S. officials maintain that cutting-off foreign access to high-end AI hardware is a vital national security objective. "Protecting America's national security means keeping our advanced Super Intelligence technology from being used to strengthen our adversaries' military capabilities," stated First Assistant U.S. Attorney Bill Essayli for the Central District of California.
The financial apparatus behind the operation was substantial. Earthmade received more than $176 million from two Malaysian freight forwarding and shipment companies between January and October 2024, according to bank records highlighted by the Justice Department. Federal prosecutors are seeking full forfeiture of the funds and assets associated with the transactions.
Legal Ramifications and Industry Impact
Lui faces three felony charges in the Central District of California: conspiracy to violate the Export Control Reform Act and Export Administration Regulations, outbound smuggling, and conspiracy to commit money laundering. As detailed by Business Insider, the conspiracy and money laundering counts each carry statutory maximums of 20 years in federal prison, while the smuggling charge carries up to 10 years, exposing Lui to a combined potential sentence of 50 years if convicted on all counts.
Responding to the charges, an Nvidia spokesperson stated that "this case shows yet again that smuggling is a losing proposition — legally, economically and technically," adding that the chipmaker continues to cooperate actively with law enforcement agencies.
The case is being investigated jointly by the FBI's Counterintelligence and Espionage Division, the Department of Commerce's Bureau of Industry and Security Office of Export Enforcement, and the Department of Defense Criminal Investigative Service.
Frequently asked questions
What charges does Greg Lui face in federal court?
Greg Lui is charged with three felony counts: conspiracy to violate the Export Control Reform Act and Export Administration Regulations, outbound smuggling, and conspiracy to commit money laundering.
Which hardware models were identified in the smuggling operation?
The indictment names Nvidia A100 and H100 data center accelerators, as well as GeForce RTX 4090 and RTX 5090 consumer gaming graphics cards.
How did the alleged transshipment network work?
Earthmade Computer Inc. purchased export-controlled servers using false paperwork asserting they were for authorized clients in Malaysia and Singapore, and then coordinated with freight forwarders to reroute the shipments to China.
How much money did Earthmade Computer Inc. receive from the operation?
According to the Department of Justice, Earthmade received more than $176 million from two Malaysia-based shipment companies between January and October 2024.
Sources
- California tech CEO arrested, faces up to 20 years in prison for smuggling $300 million in Nvidia AI servers to China — federal prosecutors say chips were routed through Malaysia and Singapore…Tom's Hardware · Oct 2, 2026
- US man accused of smuggling $300 million in Nvidia chips to ChinaBusiness Insider · Oct 2, 2026
- California Man Arrested for Smuggling More Than $300 Million in Export-Controlled Computer Servers to Chinajustice.gov · Oct 1, 2026
- Who Is Greg Lui? CEO Accused of Smuggling $300m of AI Tech To ChinaNewsweek · Oct 4, 2026
- California man smuggled $300 million of AI hardware to China, feds say - Los Angeles TimesLos Angeles Times · Oct 2, 2026
- Nvidia GPU Smuggling Case: $300M, 4 Chips Namedshattered.io · Oct 4, 2026
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Published October 5, 2026 at 01:07 UTC
